He's been charged with making sure the Chicago-based platform provider is giving advisors what they need, and working with advisors to optimally implement the services.

"Jay's expertise in running a large RIA will help us engage with advisors and serve high-net-worth clients in a more scaled, efficient way," says Envestnet president Bill Crager.

Before joining Lenox in 2010, Hummel worked as a strategic consultant for the Ward Group, a financial consulting firm, and as an accountant at Deloitte & Touche.

"My goal is to bring a business perspective" to the job, Hummel says. "Envestnet is viewed in the market as a technology company, which is good, but we're also in the solutions business. I want to take technology and the human capital we have and contour it around business to help advisors."

COMPETITIVE CHALLENGES

Even though Envestnet is a leader in turnkey platform services for advisors -- such as client reporting, portfolio and data management, analytics and back office service and administration -- observers say the company still faces a host of challenges and can use someone RIAs can relate to in the trenches, where competition can be unforgiving.

To be sure, Envestnet is currently riding high.

The firm's adjusted revenues for the second quarter ending June 30 increased 64% to $85 million from the same period last year; it works with over 33,000 advisors and has over $620 billion in total assets on its platform.

And just this week Envestnet's Seattle-based Tamarac division, which specializes in the high end of the RIA market, signed two deals with big, fast-growing firms looking for new technology and scale: Minneapolis-based CLA Wealth Advisors, which manages nearly $4 billion, and Beacon Pointe Advisors, based in Newport Beach, Calif., which has around $7 billion in assets.

SMALLER FIRM FOCUS

Smaller firms may be more problematic, according to Alois Pirker, research director for Boston-based Aite Group.

"There's a lot of firms who haven't upgraded for a long time," he says -- "and while big firms and breakaway brokers are used to paying a monthly basis point fee, if you haven't been paying something for years, anything compared to zero looks big."

Crager admits that for smaller RIAs, there is often "an emotional issue around cost versus practical needs."

That's where Hummel comes in, he says: "Jay's experience inside Lenox and as a consultant makes him uniquely qualified to help advisors understand the value of those investments and manage the costs."

ONLINE RIVALS

Envestnet -- and other turnkey providers -- also face a long-term challenge from so-called robo advisors, says one executive familiar with both industries.

"In the short term, digital advisors are good for service providers like Envestnet," says the executive, who asked not to be identified. "Advisors will have to compete with them and will need a digital presence and help. But in the long term, fee pressure from the Wealthfronts and the Betterments will erode advisors' margin, squeezing them and their ability to afford to pay vendors like Envestnet."

Not surprisingly, Crager agrees that Envestnet can expect more digital business -- although he disputes the firm will suffer in the long run.

Envestnet is building a digital consumer portal that advisors can use for clients so inclined, he says. The company's ability to scale the costs, he argues, will make the feature affordable for advisors -- despite the increasing commoditization of investment products.

Nor does he think shrinking fees will harm Envestnet's profits over the long term. "Not every client will be serviced with technology," he says. "Many will have problems that need an expert, and that means a human, not an algorithm."

Envestnet, he argues, will be able to provide advisors with the services they need to deal with complicated financial problems, and command profitable fees for doing so. "Envestnet is ahead of where robo advisors are today," he claims. "They're not able to do the work of providing real financial advice and we are."

CUSTODIAL THREAT

Observers also contend that Envestnet is vulnerable to increased competition from custodians offering platform services when interest rates rise.

Increased interest income from assets in custody will drop straight to custodians' bottom line, they say, giving custodians extra cash to woo advisors from platform providers.